our seafood dinner for two for just 25 dollars! first get salad and cheddar bay biscuits. then choose from a variety of seafood entrées. plus choose either an appetizer or a dessert to share. offer ends soon at red lobster! where we sea food differently. thanks for watching. "hardball" starts right now. storm front. let's play "hardball." good evening. i'm chris matthews in washington. let me start tonight with this. there's a reason the president's an'sy target tonight. he's a ship with the engine off. he can go play golf, take marine one up to manhattan. none of that matters. none of it. what matters is he commands no big cause. there's no thrust to his presidency right now. as i said, the engine's off. all you can say he's concerned

about gun violence, but the bill's dead. dead as a door nail. oh, you can talk about immigration, but it's out there on the horizon somewhere where rubio and schumer and mccain live in legislation land. no, the engine's dead. that's why this president is under fire. his people are unexcited because they've not been called to be excited. the middle is simply watching the fireworks right now and the right, well, the right is throwing torches into the fire, of course. so there's now a challenge to be met. and i can tell you from experience this is the time for professionals. yes, professionals. i saw ronald reagan in big historic trouble over iran/contra, caught sending missiles to the enemy in iran. nancy reagan called in bob strauss from the democratic party he said to clean house and bring in the pros. reagan did and saved himself. the pros were bacon and ken duberstein. president obama has to stop taking advice from fans who keep telling him he's right and only they can be trusted. he needs to act. he needs to fire people. he needs to grab control of his

presidency. he needs to surround himself with people ready to fight on every front. the three problems he faces now, benghazi, the irs and the fbi are less likely to be two problems by this time next week than there are to be four and counting. why? as i said, it's not just that he's under attack. it's that he's vulnerable. that is obvious to everyone this side of the white house gates. joining me right now is nbc news chief white house correspondent chuck todd and ron, editorial director at "the national journal," also a former national bureau chief for the much selected "associated press." let's begin with the scandal de jure. the administration has been desieged with the department of justice's controversial and sweeping use of subpoenas to secretly collect phone records from more than 100 journalists at the "associated press." those records included two months' worth of outgoing calls for work and personal phone numbers from more than 20 separate phone lines in new york, washington, and hartford. what was d.o.g. looking for? the "ap" was informed their

phone records had been seized by the u.s. attorney, ronald machin. leading an investigation tied to an "associated press" story last year, officials laeb s leaked se information about a foiled plot in yemen. attorney general eric holder told the press he recused himself into investigations to the leaks including that one but voiced strong support of his deputies who ordered the subpoenas. take a listen. >> i have to say this is among if not the most serious, it is in the top two or three most serious leaks that i've ever seen. put the american people at risk, and trying to determine who's responsible for that i think required very aggressive action. and as i said, i'm sure that the subpoena as formulated based on people i know, i don't know about the facts, but based on people i know, i think that was was done in conformance with d. ovp g. regulars. >> jay carney fielded numerous questions about the issue at today's white house press

briefing including those eventually accusing the administration to resorting to bully tactics and intimidation when it came to first amendment rights to freedom of the press. here's carney. >> the president is a strong defender of the first amendment. and a firm believer in the need for r tthe press to be unfetter in its ability to conduct reporting and facility a free flow of information. he also, of course, recognizes the need for the justice department to investigate alleged criminal activity without undue influence. and as i said yesterday in my statement, other than press reports, we have no knowledge of any attempt by the justice department to seek phone records of the "associated press." >> let's take a look at the breaking story right now. chuck, the "ap" is putting out the word the inspector general's report which is coming cites ineffective management irs, which allowed the people in the agency, in the cincinnati office, tasked with doing this, to go after tea party groups. ineffective management. does this add anything to this? >> mistakes were made

apparently. i'm sorry. it's like, do any of these people -- they've all read the wrong parts of history when it comes to quote/unquote crisis management. by the way, i'm still trying to figure out, i'm not getting a good explanation as to why eric holder recused himself. how does he oversee any investigation? >> including the irs investigation. >> you watched the press conference. basically said it had something to do with the administration. any kind of investigation of this -- >> the investigation of the irs is the -- i mean, that is -- it is just like this sort of blanket attempt that the obama administration wanted to have and, frankly, other previous administrations. journalism shield law when they would say, we want to invoke national security privilege here every once in a while. >> before we start anything -- >> that's an umbrella. >> we have this fbi story, investigating the "ap." your former organization. going after 100 reporters. their phone records. the irs, why did they go after the tea party groups and right wing groups? we have, of course, this murky

thing of benghazi. who in the white house sitting there right now, man or woman, grown-up, older guy, older woman, who is personally responsible for helping this president get his clarity out, his message out on all three fronts? who's the pr expert in the white house? >> i would say the three people are dennis mcdonough, dan pfeiffer, jennifer palmery. jennifer palmery went through clinton and through john edwards. >> in strong terms or just sicca fan? >> everything you hear about them is that they do you bring up a good point. we don't know unless we're in that room. >> what's your sense? >> my sense is they don't. or he's not listening. somebody needs to tell him exactly as you said at the opening. he needs to hear the fact this train is coming. the only way you get in front of it is get all the information out, out in the time and manner you want to. you don't wait and let things leak out the way they've been. don't let yourself be second

guessed. don't let yourself look like a thug -- >> let's talk about the benghazi -- >> we'll start with that. a lot of people think that's not properly called a scandal. what is it, though in what to you call that thing? >> it is sort of this -- i don't know what to call it. we'll call it a controversy. >> the enemy -- >> he believes that it is a witch hunt by republicans. >> he thinks that. do they think it's a witch hunt? >> that's what the white house thinks. >> you think the right wing is playing a game here? >> on benghazi? >> it's just a game? or is it something there they've never been clear about? >> have an open mind to see where the investigation -- they have a perfectly legal and legitimate right to investigate this. i don't understand why the investigation isn't focused on the cia and state and security reasons. it seems clear to me the cia is somehow -- they're escaping this more than any other part. >> they are arguing and have been arguing since before the debate with mitt romney, we all watched on television, that this administration covered up an act

of terrorism to get re-elected. that's their main point. did they or didn't they? >> that should be the focus. my guess is we find out that is not the case. the problem is because the administration mishandled the talking points, the message, they have allowed the republicans to take advantage of that and shift the focus to -- >> and define if a fifine it an- >> dennis mcdonough, chief of staff to president, dan pfeiffer, jennifer pamier trying to figure out how to get the one issue behind them? >> they're assuming this is going to get behind them. this is no big deal. it will blow over. >> let's move on to something. i'm convinced just studying politics people are more concerned about their own lives than something over in libya and they're going remember it. every time they get a tax form, every time they have to go to fico, get the envelope, when they have to pay taxes which is a lot for a lot of people, they're going to think of this. it's like the priesthood in my religion. oh, yeah, i have to go to confession. what about these guys? it always comes to mind. i think it's a slow burner.

i think it's around. is there any way the president can say, i will find a way to make sure nobody ever thinks that again? >> i think he's got one more opportunity. certainly if you listen to carney very carefully today, i think he was telegraphing what they're going to do. which is we haven't read the report yesterdt. we haven't read the report yet. that you would assume unless they're not listening to the problems that they have, they're going to look at the report and do whatever they can to take -- to show that they're taking action on -- >> can't they just say the next head of the irs will fire anyone involved in this or we will not appoint them? >> that's a good place to start. you also have to take sure they have complete credibility around the most important fact at the end of the day which is how high up did this go? did it stop at the irs? >> what evidence to you have, to be tough here, what evidence do you have it went beyond the irs? >> i have none whatsoever. i'm not saying there is --

>> there are people out there alleging that this went farther than the irs. >> who are they? >> private citizens. they were romney donors and romney supporters who have been telling a lot of reporters that they have been -- they have felt harassed by government. whether it's the ir skrs, the l department, they have felt harassed in some way. i think all of these people after watching what the irs did -- >> let's go with what we know. did you hear carney today say we got the word at the white house office a couple weeks ago that this was coming? he specifically identified this particular report. not some i.g. report. i was making the reading a day ago. they knew there was an i.g. report. they didn't know it was about this particular problem. now it's pretty clear the white house knew about this particular problem two weeks ago. >> two, three weeks ago. >> why didn't the office tell the president? >> that not a question they've answered in any -- >> did anybody ask carney why didn't the white house counsel tell the president what was going on here?

>> not everything is told to the president. >> what's the thinking behind that? >> if i was dennis mcdonough -- >> is there some insulation around the president, see no evil, hear no evil? >> i don't know if that's it or it is just pr incompetence. that question should have been answered. >> you find out -- i don't care what numb skull we're talking about. not even a political pro. you know that the irs is checking on people's political, going particularly after right wing groups and you know the president has always been suspected of being a liberal and out to get those people. then you find out there's evidence that his irs is doing that. don't you tell him, boss, we have a problem here. >> pr nightmare. >> right. >> and the boss -- >> particularly, you know, obviously they believe and carney said today, he said nobody at the white house has any connection to this. so if they're innocent, if they have that, they still should be outraged. >> okay. let's talk about us. i watched the pressroom today. i watched you as always. starring role. i look in that room. the president needs not people on his side, but people to believe him. not in him. but him.

the next couple years. he's still got a couple years to get something done. these issues like immigration depend a lot of trust. will you really enforce it when you pass it? not like simpson/mizzoli 20 years ago. you have to say, we're going to make this work. we're going to clean it up. he needs trust. that newsroom, will they trust him again after going after the "ap"? >> i think there's a lot -- trust is an issue. that, to say that you trust that this government is acting in a credible and honest -- >> a bullying way. >> if what they did on "ap" feels like a bullying maneuver, and i would say -- >> to shut you guys down. >> they have to -- and they've been doing this on national security more than any other -- i think they do need to come out and restore some trust. >> same question to you. >> start with the journalism shield. >> you say people that sit out there every day and really are the first grabbers of the news. they grab it, not everybody watches those press conferences. grabs it and all of a sudden it's on the wires.

>> i have a slightly different take. if i'm sitting in the pressroom like i used to do, what arose my trust in the white house is when i'm deceived, when i'm spun, when i don't get all the facts. that's the lack of credibility. i think it's hurting -- >> the rolling disclosure. >> rolling disclosure. the problem with the "ap," the signal they're sending to the press, the signal they're sending to good men and women who want to get information out that the public needs to know but their bosses don't want out. this is the message to the sorts saying, you know what, big brother is watching you. that's an intimidating fact not to us but to our sources and people trying to serve this country. >> this was not an attack on the press. this was an attack on leakers and whistleblowers. >> who cares about the press. >> there are a lot of people inside the government who are not happy with the wiretapping laws that are allowed to do this. who maybe think the drone program -- >> some of this leaking was on the side of the administration like the yemen thing. what a great job they did. isn't that ironic? that's the one they're going after? >> we love our leaks but don't -- >> by the way, that's why the hypocrisy of some of the

criticism coming from -- oh, please. you guys are the ones -- >> the guys on the right were saying we want to know what happened with those leaks. we're now finding out through the worst way but finding out. chuck todd. thank you. ron fornier. more on the three controversies threatening the administration. more coming. a lot more tonight. the ir strks, benghazi and the secret subpoena of phone records of the "associated press." this is "hardball." the place for politics.

well, minnesota's about to become the 12th state in the country to approve marriage equality. the state's senate gave final approval to a measure allowing same sex couples to marry and minnesota's democratic governor mark dayton will sign it into law this hour. minnesota will join iowa as one of the two midwestern states to allow marriage equality. so in the past two weeks, three states have approved it and that's moving forward in illinois now as well. we'll be right back.

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welcome back to "hardball." we're learning more by the minute about the irs scandal. as i mentioned earlier, a new headline out now from "associated press." "inspector general, ineffective management at irs allowed agents to target tea party groups." wow. the "washington post" reported earlier today this case was not confined to that office in cincinnati. the office that had been tasked with reviewing the non-profit groups. "post" reports additional irs employees in washington, d.c., and out in california also looked at the tea party groups to determine their eligibility for tax exemption. the irs says steven miller who's been serving as acting commissioner since last fall was told this has been happening, well, was happening back in may of 2012, about a year after lois lerner who oversees that division was informed himself. miller wrote in "usa today" in part, "we should have done a better job of handling the influx of applications by add o

advocacy groups. mistakes were made but in no way due to political or partisan motivation." "there was a shortcut taken in our processes. the mistakes we made were due to absence of sufficient process for working the increase in cases and a lack of sensitivity to the implications some of the decisions that were made." senator sherrod brown is a democrat from ohio and member of the banking and finance committees. senator brown, does this cover it, lack of sensitivity when you see patriot and tea party on the name of a group and you don't know it's a right wing group? is that conceivable that a person wouldn't know that? and if they didn't know it, why would they be looking for those words to decide which groups to take a look at? >> well, they should know it and they shouldn't do it, and it's, you know, people should lose jobs over things like that. but, you know, it's bigger than that. the irs, it's wrong what the irs did if they singled out individual ideological peoples that were in a certain place in

the ideological spectrum. but it's also wrong that organizations posed as charitable organizations got this tax break, got this tax exemption and then obviously engaged in political activity. the irs needs to, regardless of whether they were on the left or right, no matter whom or who they were advocating for or against, the irs should go after people that broke the law in that way and posed as charitable organizations when they were spending millions of dollars in political campaigns. >> i'm not asking you because i trust you a lot, i'm just thinking, what would be your emotional reaction, gut reaction, if you heard kick hdi cheney, they were investigating groups with the word progressive in the organization. >> of course, i feel anger about that and moral outrage about that. i think this is the same thing. i do say it's bigger than just what the irs has done that's being reported now. the bigger issue is the irs

allowing groups that are engaging in political activity in a big way, tens of millions of dollars, to pass themselves off as charitable contributions? that's breaking the law as the irs apparently has done here by singling out groups. so this needs to be an aggressive afforcement regardless of your political stance, political position. liberal, conservative, progressive or far right. the irs needs to look at the tax exempt status of these groups that are masquerading as charitable organizations. >> okay. the president. i don't know, sometimes when he talks about gitmo and things like that, i get the sense he's more of an op-ped writer than president. he doesn't act like he has control over the united states government. does he or does he not, as chief executive of the executive branch, control the treasury department? does he or does he not control the irs which is part of the treasury department? can he go over there and clean it up himself? can he make it happen? >> well, i thing k he can.

i understand people are protected by civil service and all of that. the president needs to show leadership here. needs to make sure this gets cleaned up. people should lose jobs if they were doing what the media think that they were doing. at the same time, the president needs to be part of a broadening of this enforcement. whether it's department of justice or whether it's an aggressive, whether it's other aggressive federal agencies that say, no, you're breaking the law. you don't automatically get a tax exempt status just because you say you should. you need to -- >> we had somebody yesterday told me, somebody on the right yesterday was here and she was pointing out that they were held to a standard. they could not get involved in elections. they couldn't put the name of candidates on their ballot, on materials they send out. there is disciplining going on within these groups. you and i know it's a vague difference between saying you're a policy organization and you hate obama care, but they were told they couldn't say the word "obama care" as they get closer to the election.

so somebody's at least policing this correctly. if you were holding a hearing now on the next commissioner of the irs, what standard would you set? what actions would you demand of that person, man or woman, who's about to get the permanent job now because it's open? >> well, i would look at, first of all, i'd look at what senator whitehouse shared with a group of us today. senator whitehouse from rhode island. what these forms say that you fill out before you get this charitable exemption. 501c4s. if you're going to make in millions of dollars and not spend it for charitable purposes. whoever is head of the irs, whoever is doing the day-to-day work there, needs to begin to look more aggressively and to look more thoroughly at what they're doing that way. because, you know, whatever this right winger said on your show, this conservative said yesterday, i saw part of your show. i didn't see that. i saw congressman from ohio, turner, on yesterday. there clearly were tens of millions of dollars spent last ars, a you know, in

races all over the country where these supposedly nonpolitical, these supposedly charitable organizations were taking very strong political stands for or against candidates. and, you know, we should look, should they have gotten that tax exemption? i don't know what the answer is. i think the answer is probably no in many cases. i think you look at the left or the right. it doesn't matter. if they broke the law, thaw broke the law. >> by the way, mr. turner was on yesterday. mike turner. he's studied well at the school of not answering questions. i think he was 0 for 6 by the way. thank you so much, senator sherrod brown, for coming on tonight. jonathan alter is msnbc political analyst. author of the upcoming book "the center holds: obama and his enemies." it's a fantastic book. i won't say a word about it. except it's great. you're a great writer. there's a hell of a lot good stuff in there. let me ask you this about the situation here. if you were -- this president, i think, is facing some historic notes in his biography.

he may not want to see. like irs, fbi, even benghazi. although it's unclear right next no it. how does he get through this thing? he's up to his elbow in alligators. >> he has to get on top of this story. you know, today was disastrous. i thought that eric holder's briefing was disastrous. he tried to claim that they had exhausted all other avenues before they surveilled 100 "ap" reporters which is completely untrue. they didn't even tell the reporters that this surveillance was going on. so that was one avenue they didn't exhaust. and i thought jay carney's briefing was also disastrous. it was kind of like, reminded me of in the '50s when kids would get under their desks in the cold war, duck and cover exercises. >> yeah. >> was duck and cover today in washington. so he needs some new political help inside the white house. he doesn't trust people very much. unless he's comfortable with them over many years. he has to get over that, bring

in some new high quality political help. not to work the political angles, but to help him get on top of this and save his presidency. otherwise it's going to be a long, hot summer of scandal. >> john, you got to the heart of it. sometimes your best advisers are people who are not invested in you. >> right. >> that's the hardest thing. you bring in a gergen to help clinton. you bring in howard baker to help reagan. sometimes the best advisers are not sicca fans. they don't depend on you for emotional response. they're willing to come in and say, i'm here for six months. i'm here to clean up. i can help you. i'm a pro. sometimes a professional or an elected president says, wait a minute, i got elected to this job, not you. i'm the boss. you know, it's hard to get the boss to come down from his high lads e ladder and say, i need some help. >> he in some ways infant lizs the people around him. a lot of them are young. some of them are smart and

talented. they're all in awe of the president. they have an unhealthy love for him. yes, they do sometimes tell him the bad news which he says he wants. they're not all sicca fans. he has not figured out how to get other people in. we could go over a list of names. i think there are actually very talented people around who could help him with more creative ideas for getting on top of it. on the irs, for instance, he needs maybe former heads of the irs to be a special term-limited prosecutors who have to report back in six months instead of six years the way it was in the 1990s. and they need to make recommendations that include not just possible prosecution, because it sounds pretty bad what happened there. but also to strengthen the law, you have a situation, chris, where karl rove, just to go to specifics on what sherrod brown was saying, karl rove in 2010 had a filing to the irs where he said that crossroads gps is c4 super pac was not, quote,

predominantly a political organization. then they spent $70 million in 2012 on attack ads. if that's not political, what is? so basically in some ways the irs has not been aggressive enough. the same thing applies, by the way, to bill burton and the pro-obama superpacs. the law is not being enforced to prevent these organizations from masquerading as social welfare groups. they're political groups and should be fined by the irs if they engage in this kind of political activity. that's not happening. >> i think actions speak louder than words and i got to tell you something, when reagan broke the petgo strike and fired them all for breaking their oaths, everybody in the world, including the moscow got the word. they knew we had a strong press. talking ain't going to do it. henry higgins. it ain't going to work. thank you, jonathan alter. we'll be right back. [ musick ] i knew there were a lot of tech jobs

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ha! back to "hardball." now to the sideshow. some republicans are tickled to see the white house caught in a trifecta of stories this week. benghazi, the irs, and now the "associated press" story. steve colbert focused on the irs scandal and brought champagne. >> this should send a chill up your spine. >> it is absolutely chilling. >> this is chilling. >> oh, yes. it's chilling. which also describes the champagne i've been waiting to break out for just this scandal. because -- mmm. folks, this proves that everything i've ever said about obama is true. so it's official. he's a secret muslim shape shifting alien from kenya who is coming from our guns and bo is a member of the illuminati.

next, prince harry was in new jersey today visiting areas hit hard by superstorm sandy. governor chris christie had to follow through on a promise. back when christie found out about the royal visit, he assured everyone harry's stay would be far different from his scandal-plagued visit to las vegas last year. >> i'm thrilled that he's willing to come. he wants to come and see the destruction, himself, firsthand. and he wants to be helpful. and i'm going to be spending the entire day with prince harry. so believe me, nobody's going to get naked if i'm spending the entire day. >> the proof comes in the form of a tweet from governor christie earlier today. "greeting prince harry at the jersey shore the best way i know how, with his own royal fleece." in the aftermath of the storm, of course, it seemed like christie didn't go anywhere without his fleece. there it is. up next, more details from the inspector general's report on scandal from the irs. that's ahead. you're watching "hardball." the place for politics. protected on the road.

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i'm hampton pearson with your cnbc market wrap. another new high for the dow and s&p. the dow finishes up 123 points. tr driven by gains in. s. the s&p adds 16. citigroup shares rose more than 2% after hedge fund manager david tepper said the company was his biggest holding. morgan stanley shares rallied after it told investors it would hit 10% return on equity by next year subject to certain conditions. that it from cnbc, first in business worldwide. now back to "hardball."

welcome back to "hardball." you don't see many days like this. we got ahold of the i.g. report on the irs scandal. it said the irs used inappropriate tactics in reviewing conservative and tea party groups applying for tax exempt status. it also makes clear many organizations received unnecessary burdensome questions like give us the list of your donors. it says the irs got the idea for this whole program of going after these groups from members of congress. now, that's going to be fascina fascinating. they must have a letter from somebody. we're joined right frnow by michael steele, former chair of the rnc. and ron reagan is an msnbc political analyst. i want to start with you, ron. we were going to talk about benghazi, but this is the hottest story. three points, clearly. i'm reading from the report. this is the actual report. "early in the calendar year 2010 the irs began using inappropriate criteria to identify organizations applying for tax exempt status for

significant political campaign intervention." what the irs was doing trying to find out if groups, right wing, left wing groups, were actually campaign groups, were actually out there politicking. they say at the bottom, here's what they say that's really important. "the irs used inappropriate criteria that identified for review tea party and other organizations applying for tax exempt status based upon their names or policy positions instead of indications of potential political campaign intervention." instead of looking for -- signs that they're playing politics like using names of candidates or using the name obama care, they went after them based on their right wing nomenclature. tea party patriot. that sort of thing. your thoughts. >> yes. clearly this is wrong. clearly this is a problem. i haven't seen the report you're referring to. this story broke while i was sitting here. >> it broke while i was sitting here, too. >> yes, i know. withdr you have a bigger staff than i do, though. >> fair enough. >> at any rate, clearly there's

a problem here. clearly there was mismanagement here. the issue it seems to me, how how up does this mismanagement go? who knew what, when? how high up the food chain? if it's restricted to the office in cincinnati, i don't know that this has huge legs. >> that was the office that was tasked with doing this thing. it wasn't just the office in cincinnati. let me go to this. here it says the t.i.g., the inspector general, initiated this awe dits basedessed by mem congress. it's not that they gave up the irs, michael steele, the idea to do this. they got the idea from members of congress. probably republicans, that our people are getting attacked, getting audited. whatever. >> people are getting under attack. and they're getting confirmations or concerned calls from folks out there who are under attack. that's a possibility. but it also could be other members of congress who also said in light of, you know, citizens united and the ascendency of these conservative money groups.

>> yeah. >> to let's focus in on what these guys are doing. what is their political agenda? all of that, i think ron touched on it, all of that really doesn't bubble up too far if it's just located in cincinnati. from wa hat we know, this is bigger than that. this does have some legs to it. now we need to see where it goes in light of this report. this report, quite frankly, doesn't add anything really new to the conversation -- >> except this thing with the right wing. the conservatives basically wanted this thing done i would say. that fact, it said the overall objective of this audit was to determine whether allegations were founded, i guess well founded, meant to say the irs targeted specific groups applying for tax exempt status. and three, requested unnecessary information. so this apparently resulted, ron, from a complaint from interested groups. probably on the right. because they're the ones who are the victim of this focusing. saying, look out and see if anything happened here. i think this is a testament to the fact that the irs, whatever it's up to, is independent politically of the president. that's for sure. you know what i mean.

>> yeah. >> the i.g. certainly is. >> yeah. chuck todd raised a point earlier that this isn't just a story about the irs overreaching. this is also a story, a larger story, about money and politics. since citizens united, we've had a flood of these groups coming in that the irs has to vet. they have to, you know, take a look at all of these things and you have hundreds of them pouring in. now, you know, they obviously did a bad job of vetting and did it improperly here, but this is a broader story ultimately, it seems to me. >> kelly o'donnell is joining us right now. she, of course, is correspondent for nbc news on capitol hill. thank you for joining us. you know, i just saw this little addenda here. the first time i've seen this. that this whole audit was triggered by concerns from members of congress. >> sfwlabsolutely. for the last couple years members were telling us and telling officials at the irs that their constituents were having a problem. and one of the things that triggered this was something this report we obtained just a short time ago points out is burdensome extra steps that

would not be the normal part of how you would get this special tax exempt status. which is something you apply for and not everyone gets. so by hearing from constituents, you had members of congress, both senate and house, asking the irs about this. and they kept getting back no, nothing like this. no, it's not happening. and that's where this gets very interesting and becomes sort of so politically charged, because when you bring the acting director or the director of the irs or other officials before congress, and they swear to tell the truth or they provide answers in a letter that are either nonresponsive, or factually inaccurate, that really gets people fired up. so this report has been going on for quite a long time and it uncovers some things that -- >> my favorite role, about to play devils advocate. what's wrong to ask if the koch brothers gave to the organization? they don't like democrats. they try to defet them. they spend their money to do that. why not check and see if the koch brothers were giving to one of these groups to find out what

the real purpose was? >> you can't single out the koch brothers. you can't single them out just because you don't like their politics, you don't like their expression under the first amendment against the obama administration. so that's the problem here. when the government singularly targets the koch brothers and those who support the koch brothers' efforts, that's a problem. and that's where i think the administration has really dropped the ball on this thing. >> let's get one thing straight. suppose they did this and looked under progressive as well as tea party. suppose they looked under words that sort of ring with liberalism. >> it's still problematic, chris. it's still problematic. you cannot single somebody out because of their ideology, because of their political -- >> these groups are all either left, right or center. >> it doesn't matter. >> chris, instead of taking them sort of one by one, they grouped them, flagged them within based on their name. >> the harassment, if you will, was focused on people with names, not with their past histories, violations or interventi interventions. go ahead, ron. your thought. they even say it here in the

report. they should have gone after where they had evidence of intervention and politics, not evidence of bad names, if you will. >> well, exactly. i was trying to chip in the point everybody else was making. there's a difference between having a name, you know, having a point of view and actually doing things. actually politicking. that is they should have waited for and should have investigated. not just the name. >> that's what this whole thing is about. thank you, ron. you've nailed it. thank you, kelly o'donnell, for the newest report. thank you, michael steele. up next, the three controversiesy ies in the obama administration sparked term of a second-term curse. that's an old fraephrase. the second-term curse. can president obama make his second term matter after all this stuff? that's my question. this is "hardball." the place for politics. what imp. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪

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so far, hillary clinton's poll ratings haven't been negatively affected by all this talk by republicans, of course, about benghazi. a new ppp poll finds that hillary's at 52% favorable, 44% unfavorable. virtually identical to where she was in late march before this brouhaha started. and voters trust the former secretary of state over congressional republicans on the issue of benghazi by a margin of 49%-39%. we'll be right back.

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i sure want to do some governing. i want to stuff done. i don't have a lot of time. i've got 3 1/2 years fast and it goes by like that. >> that's president obama, of course, speaking at a fundraiser just last night shortly after news broke that the justice department had secretly obtained two months worth of phone records from the associated press. it was the next blow in a cascade of stories including irs misconduct and a muddy mbenbeng explanation people have been talking about all along. on "hardball" we'll look at obama's stated goal to do some governing, get some stuff done in the face of stories that republicans are going to use like a hammer to stop this president in his tracks. doug brinkley is president of the historia.

n nia-malika henderson. let's start with nia. seriously now, the president's two goals. defense and offense. does he go on offense and start doing stuff and hope this other stuff will rattle away from him because he's a man in motion or does he have to put out all these fires and maybe he does first before he gets to get any attention on anything else? does he have to feel with benghazi, putting the blame where it belongs if there's blame on the irs and dealing with the fe of the fbi going after a major news organization. can he deal with any of them or does he have to do something else to put them in perspective. your answer. >>? many ways he's got to do both. he's got to get out in front of these scandals. show some leadership. maybe have a sort of buck stops here moment with these scandals, but he's also got to do his day job. we'll see him this week. he's got a meeting with the turkish leader. he's going to go to baltimore and talk jobs. but i do think until he's able to put a better framing around these skand candals that really

threaten to engulf these next couple of weeks if not months he's going to have trouble sort of setting the agenda. that's the problem. the president wants to be in a place where he is setting the agenda. you saw last week, for instance, he had a health care speech. that didn't get much press because everyone was talking about the irs and benghazi. he's really got to i think tamp down on these. not only call olivia pope and figure out what she would do in a situation like this, some sort of fixer, he's really got to figure out how to have maybe a direct to camera address about these issues. >> doug brinkley, does he have to play offense or defense now to get through to restore his second term prospects? >> i think immediately he's got to get control over these three issues. i think he might have to look at accepting a resignation from eric holder possibly. i think in benghazi it's drug on too long. just come clean, talk straight about the talking points, what happened, and move on. look, it's the coverup that always gets you in problems, and you just don't need this. it's not been a good season for barack obama.

and i think he has an opportunity to just -- i'm sure his poll numbers are going to still stay high. people trust him. but he can't let his integrity get dented and then do big things. if you're going to close guantanamo, clone se it. if you want the keystone pipeline to happen, do it. >> what a sense is a lack of action. talk. his words don't -- nia, you know this covering him all the time. he's good at words. and action, i fgo back to reaga. all the history of iran contra. reagan didn't put that behind him till nancy, his wife, got him to admit he did do it, he did trade arms for hostages. until he did that it wasn't over with. roosevelt tried to pack the court until he pulled back on that. that was the only issue. your thoughts, nia. i just don't know whether you can get away from the dealing with the issue that's flown in his face right now. your thoughts. >> that's right. i think he's always had a sort of above the fray approach to

politics in general. part of his brand was that he was a break very much from bush. now you have his supporters, the only sort of way they're able to defend him now is say bush did the same thing. he's really got to figure out a way where he can get that brand back, protect that brand. and, you know, his words in some ways seem divorced from feeling. it doesn't seem like there's a lot of outrage there about these scandals. and you have jay carney going out there looking a little, you know, sort of waffly out there. so i do think he's got to get something done. but the problem is always the same thing. i mean, he's got the same problem now that he had before, and that is a very poisonous atmosphere on the hill. and this, i think, is only going to embolden republicans. >> last question to you, doug. is he in real trouble? >> not yet. but as you said, he's got to talk directly to the american people on all three of these. he's got to push for immigration reform. if he doesn't get it, he's going to have to cut out on his own,

use executive power and find ways to lead without worrying about congress. but i think the gun control failure really did some damage to him this spring. if he had won that, this would seem much smaller right now. >> well said. thank you so much. historian doug brinkley and nia-malia henderson. when we return, let me finish with how the president needs a mission, i believe, with how to get through this mess. jobs. you're watching "hardball," the place for politics. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. you may be muddling through allergies. try zyrtec-d®.

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let me finish tonight with this. i said up front the president's problems, the benghazi talking points, irs digging into the tea party, the fbi digging into reporters' phone records are -- step one, clear himself and those closest to him of any mischief. two, fire anyone in the executive branch who was into the mischief. both are easily doable. the real problem is the nature of this second term. there's a strong sense that he, the president, lacks a hard nosed agenda right now. there's nothing the president is fighting for. asking us to fight for. there's no cause. and without a cause, there's no urgent need to be there for him. i think the best goal for this president is the one he inherited. is to create jobs. no one will ever target a democrat for trying to do what they believe deeply in doing. using the public sector to create jobs. it's been going on since the earliest days of the republic. it's what made the democratic party great in the 1930s. put men and women to work. create big construction projects that demand work and do it now, mr. president. interest rates will never be

this low ever. money will never be this less expensive. there will never be a better time to put money where it's needed, putting americans to work. and it will give the president, you, sir, something to do. and that's "hardball" for now. thanks for being with us. "politics nation" with al sharpton starts right now. >> thanks, chris. and thanks to you for tuning in. tonight's lead, making sure justice is served. moments ago, a government watchdog issued a report blaming ineffective management at the irs for allowing agents to improperly target tea party groups. this just comes hours after attorney general eric holder announced a criminal investigation to learn if any laws were broken. >> i have ordered an investigation to be begun. the fbi is coordinating with the justice department to see if any laws were